Flat and Walking the dog

USA

I have been busy so no time till now to update the blog. Not much lost since the market continues flat. ( I speak of the Dow, more of the FTSE in a moment.) I’ve drawn a tentative new support line. Although the old one was broken several days ago the price has not fallen sufficiently to give a down signal using my Support and Resistance system.

From a trading point of view it is very frustrating. You will recall I am fully invested in US stocks. The market is playing with me: one step forward, one step back. Nothing to be done except watch and wait an be ready to bail out if necessary.

UK

The UK is very similar, albeit with a more volatile manifestation of going nowhere. The new Governor of the Bank of England is due to make his first big announcement today. It is reported that he will unveil a new policy of guidance on interest rates. This means the bank will say that interest rates will remain at x (x being half of one per cent at the moment) for a period of time unless something specific happens e.g. inflation rises above a certain level or unemployment falls to a specified point.

The reasoning is that short term interest rates cannot fall further, so that bolt has been shot. And longer term interest rates, over which the Bank has less direct control, are edging upward. However, it does not address the question of QE. If the Bank stops buying bonds prices will continue to ease and long term interest rates will, de facto, rise. So the likely effect on the stock market remains hazy.

My portfolio is holding up reasonably well despite carrying two lame ducks: THT and GLE.

Current holdings are: UK: THT AML WIN CLND III BDEV KLR GLE SDY TW. LLOY SIV GVC US: ZHNE HCBK LSI TBF KTOS LEE ARC ORBC SBCF SNV SOL HSOL III UVE GTN EVC COCO LFVN

I am 98% invested and feeling a bit exposed.

Walking the dog

My wife has broken a toe so I am walking the dog twice as much as normal. When I walk I listen to podcasts from BBC 4. Yesterday I listened to a special on “How you pay for the City”. I strongly recommend this to all of you.(Alternative link for on line listening here)  

It explains why I work so hard to manage my own portfolio and probably why some of you do the same. It may also encourage those, sitting on the edge of the pool, still using financial advisers and financial products to "look after" your savings, to take the plunge and to do your own investing.

The program explains in graphic and horrifying detail how the city is robbing you blind. The program should come with a content warning. The Simpsons once announced to its viewers "The preceding program contained scenes of extreme violence and should not have been viewed by young children." 

It explains how many organisations, all of them grown very fat on your money, take a slice of your cash, before a single penny is used to buy a stock. Even after the shares are purchased the gouging goes on.

The city gets rich, its employees enjoy bonuses. All because they can legally pull off the trick that some fraudsters successfully exploit. If you can break into an accounting system through which money flows and then shave off a tiny sliver from each transaction, no-one will notice and you can make millions. Billions in the case of the financial services industry.

It’s a massive endorsement for making the effort to do it yourself.